British chemical giant Ineos will build three "world-scale" plants in Saudi Arabia, in what seems to be a geographical diversification for the company.
The company has inked a memorandum of understanding with Saudi Aramco and Total SA to build the $2 billion new plants at the Jubail 2 complex, marking its first production footprint in the region.
Saudi Aramco and Total are currently working on a $5 billion Amiral petrochemical complex which will include a "world-size" mixed-feed steam cracker with a capacity of 1.5 million metric tons per year of ethylene and related high-added-value petrochemical units.
In a June 3 statement, Ineos said its three planned units will be part of the project.
Ineos will be build a "state-of-the-art" 425 kilotonne per year (ktpa) acrylonitrile plant, using its homegrown technology and catalyst systems.
The unit, claimed to be the first of its kind in the Middle East, is set for start-up in 2025.
The company will also build a 400ktpa linear alpha olefin plant and an associated poly alpha olefin unit, scheduled for production in 2025.
The location of the units in Saudi Arabia will provide Ineos access to competitive raw materials and energy, as well as enabling the company to better serve customers directly in the Middle East and markets across Asia.
"This is a major milestone for Ineos that marks our first investment in the Middle East," Chairman Jim Ratcliffe said.
"The timing is right for us to enter this significant agreement in Saudi Arabia with Saudi Aramco and Total. We are bringing advanced downstream technology which will add value and create further jobs in [the country]."
The investment is the latest in a series of major projects carried out by London-based Ineos, which include a $3.4 billion plant at Antwerp, Belgium, and another $1.2 billion in investment across the United Kingdom, acquisitions in China and capacity increases along the U.S. Gulf Coast.
"Global demand for acrylonitrile continues to grow ahead of GDP, to meet the demand for lighter, stronger, energy efficient materials such as ABS, composites and carbon fiber," Paul Overment. CEO of Ineos Nitriles, said.
The investment in the Middle East is aimed at consolidating the company's position as the market leader and renewing its commitment to customers' needs around the world, he added.
Ineos Nitriles currently has four manufacturing plants, two in Texas and Ohio, and two in Germany and the U.K.
Ineos Oligomers has a worldwide network of LAO and PAO production plants and bulk storage locations. The business produces a comprehensive range of speciality and intermediate chemicals derived from ethylene and isobutene.
Commenting on the investment, Wood Mackenzie chemicals principal analyst Patrick Kirby said the decision by Ineos represented a "geographical diversification" for the company.
"The new investments will be integrated with the Saudi Aramco and Total JV mixed-feedstock steam cracker complex. … This will allow for a much wider portfolio of derivatives than previous ethane cracker investments in Saudi Arabia," Kirby added.
The mixed-feedstock steam cracking and closer integration of refining and chemical operations in Saudi Arabia represents a wider trend developing in the Middle East and Asia Pacific, he said. With the move, oil companies aim to gain further exposure to the petrochemical industry as transportation fuels are set to decline.